Proper Use of Taxonomy Codes

A taxonomy code is a unique ten-character code that designates your classification and specialization and enables providers to identify their specialty at the claim level.

CMS developed a crosswalk of taxonomy codes that links the types of providers and suppliers who are eligible to apply for enrollment in the Medicare program with the appropriate Healthcare Provider Taxonomy Codes.

Note: The code set is updated and published twice a year, in January and July.

Although, the taxonomy code is not required it is strongly recommended as it assists immensely in the processing of claims by identifying which PTAN to select in order to adjudicate a claim.

Note: The NPI is intended as an identification number to share with other suppliers and providers, health plans, clearinghouses and any entity that may need it for billing purposes. A PTAN, on the other hand, is specific to Medicare and is issued to providers upon enrollment with the MAC.

The use of a taxonomy code is recommended if there is more than one PTAN with different specialties associated to one NPI. The taxonomy code helps to make the one-to-one match with the correct PTAN. Also, it is imperative that when the taxonomy code is reported on a claim it is valid for the specialty billing the services and placed in the correct field on the claim. The placement of the taxonomy code is dependent on if it is being reported for the billing provider or rendering provider; and should be reported as the following:

  • Rendering –Loop 2310B PRV03 or Loop 2420A field PRV03; qualifier PE, segment PRV01
  • Billing – Loop 2000A PRV03; qualifier BI, segment PRV01

When a taxonomy code is improperly used or not reported it can cause the following issues during claim processing:

  • Delay in processing/payment
  • Claim denials
  • Improper payments

Reviewed 11/3/2023